Modest growth expected in number of IPOs in 2013

Investment bankers are forecasting modest growth this year in the number of companies going public in the U.S. via initial public stock offerings, according to a study by BDO USA, the accounting and consulting firm. After a relatively flat 2012, bankers predict a 6 percent increase in the number of IPOs in the U.S. in 2013 that should raise about $34 billion.

Mark Giamo, managing partner of BDO USA's Woodbridge office, said the study offers a promising outlook for New Jersey. "New Jersey has a strong presence in health, technology and biotech," Giamo said, and the study found two-thirds of the investment bankers expect an increase in IPO activity in those sectors. "If what the investment bankers have said in this study comes to fruition, then hopefully New Jersey will be the beneficiary of some of those public offerings," Giamo said. IPOs are good for the state's economy, he said: "If companies are raising capital and using it to invest in their business, and the business is based in New Jersey, hopefully that will bode well for the state" in the form of new jobs, tax revenues and economic activity, Giamo said.

According to the study, two-thirds of the investment bankers expect to see more IPOs in 2013 in health care, technology, biotech, energy and natural resources. More than half are forecasting more real estate IPOs and a third expect to see more manufacturing, retail, and media IPOs.

When asked to identify the greatest threats to a healthy 2013 IPO market, more than a third cited the threat of tax increases, government spending cuts, and global political and financial instability.

Giamo said the IPO market stalled toward the end of 2012 while Congress resolved the "fiscal cliff" issue with legislation that avoided higher tax rates for individuals earning less than $400,000 a year and families earning less than $450,000. "Now that some of the tax uncertainties have been nailed down a little more, hopefully the IPO market will have a better year in 2013 than in 2012," he said.

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Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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